KUANTAN: The Works Ministry will propose that the ceiling price for projects awarded to Class F contractors be raised, Minister Datuk Seri Mohd Zin Mohamed said.

"The present ceiling of RM200,000 is no longer feasible due to the rising cost building materials," he said after a briefing by the state Public Works Department (PWD) and local contractors here yesterday.

"I think the limit of RM200,000 should be reviewed for the benefit of the contractors involved. We will submit a proposal to the Treasury for an increase in the ceiling price."

Mohd Zin urged Class F contractors to submit tenders for projects listed under the stimulus package.

They should also start adopting the industrial building system (IBS) to remain in business or be left behind by the challenging global atmosphere, he said.

"If we choose to continue with conventional methods such as depending mostly on foreign labour to cut costs, then I am sorry to say that the end is near," he said.

"I suggest all Class F contractors start migrating to the new method, utilising at least 70% IBS technology to remain competitive and to boost productivity."

IBS technology, among other things, involves the pre-fabrication of construction components, minimising the need for a large labour force.

Mohd Zin also revealed that out of the 40,000 Class F contractors registered, only 17,000 were still operational and active.

He reminded all PWD staff and district engineers against offering any projects via selected tender or direct negotiations.

"All projects under the PWD are on an open tender basis," he said.